🌻4 Signs You’re Rich and Don’t Even Know It ( I LEARNT A LOT FROM THIS ARTICLE)
Stop looking up, look what’s happening below you
Sometimes, it’s better to look down than up — Source
Times are tough. Energy costs are at their highest in decades, the economy is in bad shape, and nobody knows when things are going to get better. It would be easy to think that you’re having it rough right now. But if you’re reading this article, you probably have a roof over your head, a fridge with at least a bit of food in it, and maybe even a car with gas in it (although I don’t recommend that, that’s way too expensive, with or without a crisis).
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Learn MoreIn our standard capitalist society, we’re encouraged to always strive for more, reach for the stars, outsmart our competition and work more to make more money. The only way up is through the grind, working 70-hour weeks, and skipping the weekends. But if you stop aspiring to greater heights for a minute, and look down at what’s happening below you, things take a new perspective. You always think you have it rough until you look below you.
In this article, we’ll go over 4 key points you may have not thought about that make you richer than average. This is not about feeling above others. Rather, it’s about being grateful for the life you have and appreciating the small things. Things can always be better, but they could also be much worse.
#You have some savings
In June 2022, 61% of Americans were living paycheck to paycheck. For the past 10 years, the Federal Reserve has issued an annual report called the “Economic Well-Being of U.S Households”. These reports have tracked consumers’ ability to afford a theoretical $400 emergency expense. In May 2022, 68% of Americans could cover this, except this number is way outdated, especially with current inflation levels. $400 2012 dollars are worth nowhere near $400 today, so the updated estimate for an ideal emergency fund is now $1,400. Most people can’t afford that.
A lot of people do not have savings, and it’s not just low-income workers. 46% of people making between $50K and $100K per year live paycheck to paycheck, and again this number is poised to increase with the rising costs of everyday life.
If you can afford a $1,400+ emergency in cash, you’re doing better than most people financially, so give yourself a pat on the back. And if you can’t, keep reading, there’s more to come.
You don’t know how much you spend on eating/going out/clothes
There are 2 types of people who don’t have a budget:
Those who get hurt financially by not having a budget
Those who don’t get hurt financially by not having a budget
It goes without saying that you’re only richer than most people if you’re the second type. It’s one thing to eat at the restaurant every weekend if you can afford it. But if you can’t and you keep doing it, things are going to go south at some point, and you might look rich at the moment but really you’re burning through your money. You should do something about it. The same goes for shopping sprees or partying.
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The average American household spends on average $1,434 per year on clothing. That’s $119 per month. If you spend more than that but don’t feel the financial burden, congrats, you have more money than you thought (which doesn’t mean there’s no room to improve your savings).
#You have more than 15 memberships on your card
Accumulated memberships are common in the world of financially irresponsible people, but it doesn’t mean you’re broke if you have them. I chose the arbitrary number of 15 because I feel like you’d really have to push it to actually notice all that money going out of your account every month, feel the burn, yet not do anything about it.
Let’s assume the average membership costs $12. If you have 12 x 15 = $180 going out of your account every month and barely even notice it, you’re either richer than average or financially irresponsible.
It’s worth noting that out of all the points mentioned in this article, getting rid of memberships is the easiest and fastest way to save money. If $50 per month makes a difference to you, then look at your memberships and get rid of a bunch (many banking apps now allow you to filter your expenses per type, so you can see the recurring ones).
#You own the place you live in
These days, most people can’t afford a $25,000 downpayment on a house. It doesn’t matter whether you bought your apartment/house 15, 10, or 3 years ago. If you own the place you live in, you’re a lot richer than many folks out there.
Of course, people will say that if you’re not done paying off your mortgage, the house is not yours, the bank owns it. First of all, this depends on the economic framework you’re looking at. In some European countries, the bank only contributes a small percentage of your mortgage, and the rest of it is either provided and/or insured by the government.
Second, although it’s technically true to say that you don’t own the building until you’ve paid it off, you increase your share of ownership (and therefore your net worth) with every repayment you make. Home equity is very important because even if something bad happens and you have to sell your place, you’ll get back the amount you owned on it. If you’re lucky enough to live in an area where home prices have increased since you bought, you might even be able to cover the taxes, fees, and other costs related to the sale.
Wealthy people are not about cash, they’re about paper net worth. You don’t have to have a ton of money in the bank (although as we’ve seen it’s good to keep an emergency fund). If you own assets that don’t lose value and can be turned into cash if needed, and if you minimize the amount of debt you have, your financial situation is a ton better than the average Joe.
Read also: 10 things to do to de-stress your life
“Make money your God and it will plague you like the devil.” — Henry Fielding
At the end of the day, it’s not about making or having more money than your coworker, or your neighbor, just because you want more status and recognition than them. If you’re already living a descent life, it takes a lot more than a few hundred dollars, or even a few thousand, to change your financial life. Money doesn’t buy happiness, but we live in a world where money is necessary to live. The more money you have, the less you’ll have to worry about.
Again, this article is not here to make you feel richer than your peers. In fact, it’s not even here to make you feel rich at all. It’s here to make you feel grateful. If you checked off at least one of the boxes mentioned above, know that a lot of people or having it worst than you, at least from an economic perspective.
CONTRIBUTED BY Joseph Mavericks
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